Our View: Rockford School Board right to hold line on tax levy

It would be easy to urge the Rockford Board of Education to lower the School District's tax levy. The property tax burden in this region is much too high.

We think, however, that the board made the right decision to hold the line on its tax levy because too many variables could quickly alter the district's finances.

The district is healthy financially, with $150 million in reserves. Being able to call the district healthy financially seemed ludicrous seven years ago, when the public school system here was on the state's financial watch list and issued tax-anticipation warrants to cover its bills.

The district was a step away — perhaps only half a step — from being taken over by the state. If you think your taxes are too high today, imagine what they would be if that had happened.

The turnaround has been amazing, but there are factors that could just as easily send the district in the wrong direction.

The Property Tax Extension Limitation Law, passed here in 1996, limits taxing entities to increases of 5 percent or the rate of inflation, whichever is lower. Most have taken the maximum amount they are allowed by the law. Winnebago County has 86 taxing bodies; 52 increased the levy last year.

The ups & downs of property tax calculations

When you start talking about tax levies and tax rates, the conversation gets confusing. Most people care only about what they have to pay when the tax bills come due.

Last year, the Rockford School District lowered its tax levy by $16 million, which led to 67 percent of Rockford homeowners paying less on their property tax bills. The tax rate, however, increased because property values declined. The more property values decline, the more tax rates increase because taxing entities are entitled to what they received the previous year plus the rate of inflation.

Those tax rates have statutory limits, and the Durand and Harlem school districts are closing in on them. Rockford is in good shape, but it could hit the tax-rate limit within two years unless property values increase. If it hits its limit and property values continue to decline, the district will have less money.

All Illinois school districts are wary of what the state will do with pension obligations. It's almost certain that the state will push some of the pension burden onto school districts. How much and how many years districts will get to adjust to the new expense still is being debated, but schools must be prepared to absorb those costs.

Besides, the state is notorious for paying late, so schools must have cash on hand to be ready for those shortfalls, even if they are temporary.

Rockford schools are in the midst of a $310 million capital improvement plan approved by voters last fall. One of the reasons so much money is needed to refurbish schools is that maintenance has been neglected for many years — in other words, there never was enough money set aside for buildings. Once the capital plan is complete, it's important for the district to have enough money to keep its buildings up to date.

If Rockford is to escape its economic malaise, it needs good schools producing the skilled workers needed for the 21st century. The Rockford School District has brought back the seventh hour for instruction, started the academy approach in high schools to get students ready for college or careers, and developed partnerships with businesses to further enhance learning.

The schools have built a lot of positive momentum, and it's important to invest in them to keep that momentum going. Sure, we'd like to have lower tax bills, but we'd rather have a school district we can be proud of, one that produces graduates so smart and so skilled that companies want to move here to use that workforce.